Summary

Thursday’s market moves turned on a familiar feedback loop: oil prices swung and Treasurys yields followed, shifting investor expectations for growth and borrowing costs. The S&P 500 erased an early drop and closed up 0.2%, the Dow Jones Industrial Average added 276 points, and the Nasdaq Composite rose 0.1%, according to The Associated Press.

Oil’s intraday reversals drove much of the volatility. Brent crude “briefly got above $109 per barrel in the morning,” then gave back its gains, falling 2.3% to settle at $102.58 after midday, as markets reacted to uncertainty about how long the war with Iran keeps the Strait of Hormuz shut.

AP reported that the Strait of Hormuz closure has prevented oil tankers from exiting the Persian Gulf to deliver crude worldwide, which has supported higher oil prices. When oil eased Thursday, it also eased pressure on Wall Street that had been building from the bond market, particularly after yields rose enough to raise concerns about slower growth and weaker asset prices.

In the bond market, the AP story said the yield on the 10-year Treasury briefly got near 4.63% in the morning before falling back to 4.55% after the midday turnaround for oil. Those moves came after yields were higher late Wednesday and earlier in the week, and they were viewed by investors as a headwind for equities as well as for other investments that are sensitive to interest rates.

Some parts of the stock market appeared to benefit disproportionately from the retreat in yields. AP said the Russell 2000 index of smaller U.S. stocks climbed 0.9%, and it also said airline shares rose as fuel-price expectations cooled, with Southwest Airlines gaining 2.7% and American Airlines rising 4.9%.

Earnings and guidance also moved major individual stocks. Ralph Lauren jumped 13.9% after reporting stronger profit and revenue for the latest quarter than analysts expected, helping offset weakness elsewhere, AP said. Nvidia, meanwhile, fell 1.8% despite results that beat expectations and a current-quarter revenue forecast that cleared analysts’ estimates, as investors weighed the stock’s recent run.

In its quarterly update, Nvidia’s CEO Jensen Huang said, “The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed.” AP reported that Nvidia’s stock “swiveled between losses and gains” before ending lower, as some analysts suggested the weakness may have reflected investors locking in profits after Nvidia had surged nearly 70% over the prior year, more than double the S&P 500’s 27% rise.

Other company reports added to the day’s mixed tone. Walmart fell 7.3% after its profit report, even as AP said the retailer delivered another quarter of strong revenue but issued weaker forecasts for upcoming profit than analysts expected, with AP noting the company’s consumer demand resonated with Americans growing more cautious as inflation weighs on paychecks.

Beyond stocks, AP pointed to preliminary economic readings. A flash survey from S&P Global said growth in U.S. services business activity unexpectedly slowed a tad, though growth was better than forecast for U.S. manufacturers; Chris Williamson, chief business economist at S&P Global Market Intelligence, said, “The damaging economic impact from the war in the Middle East is becoming increasingly evident in the business surveys.”

AP also cited labor-market data suggesting the job market remained steadier than economists expected: a separate report said the number of U.S. workers applying for unemployment benefits last week unexpectedly declined, signaling fewer layoffs. Markets abroad were mixed, with South Korea’s Kospi jumping 8.4% as technology stocks rose, while Tokyo’s Nikkei 225 climbed 3.1% and indexes in Hong Kong and Shanghai fell, AP said.